Private specialist medical and healthcare company
Abano Healthcare Group faces a divisive vote on June 13
following a move by dissident shareholders to remove chairman
Trevor Janes. Business editor Dene Mackenzie caught up with
Abano chief executive Alan Clarke this week for an update.

Abano Healthcare is embroiled in a dispute which will result
in a vote of confidence in both the company and chairman
Trevor Janes being put before shareholders on June 13.

The specialist medical and healthcare company is rated highly
by brokers Forsyth Barr and Craigs Investment Partners and
its full-year profit is set to rise at least 60% for the past
financial year.

Dissident shareholders Peter Hutson and James Reeves are
calling for the removal of Mr Janes, after they failed in a
takeover attempt with Australia's Archer Capital last year.

Since then, the campaign had become a personal attack on Mr
Janes.

In defence of the chairman, directors Susan Paterson, Ted Van
Arkel, Pip Dunphy, Danny Chan and managing director Alan
Clarke said Abano had provided average gross returns of about
35% a year since 2006 and provided more than $74 million in
dividends and capital returns since he became a director.

Mr Hutson, who owns the other 50% of Abano's Bay
International audiology business, and who would have gained
full control for a nominal sum under last year's aborted
takeover, was removed from the board last September.

Last month, the Employment Relations Authority upheld Abano's
right to sack Mr Hutson and his wife Anya from their
positions at Bay as chief executive and human resources
director.

Late on Friday, Messrs Hutson and Reeves filed papers in the
High Court at Auckland in a bid to delay the special meeting
they called.

In a supporting affidavit, Mr Reeves said the 13 working days
given to shareholders was not enough time because of the
''important and controversial nature of the business to be
conducted at the meeting, and the misleading content of the
notice, the complexity of the underlying issues and the
volume of biased and misleading information which the Abano
board recently made available to shareholders''.

In Dunedin last week, Mr Clarke told the Otago Daily
Times the vote on June 13 was one of confidence in the
board and the company.

He was visiting Dunedin sharebrokers, asking for their
support in the vote he said would be decided by retail ''mum
and dad'' investors.

Messrs Hutson and Reeves held 18.5% of the company and could
expect another 2% or more of shareholders to vote for them to
give about 21% support.

Institutional shareholders, who supported the company, held
22% to 23% of the company.

''There are two blocs close to each other. Making the final
decision will come down to the retail investors - the mum and
dad shareholders.

"They invest mainly through the two brokers in Dunedin and
will ask for advice or the brokers have custodial control of
the shares.

''The small shareholders will determine the future of the
company.''

The New Zealand Shareholders Association had come out
strongly in favour of Mr Janes and Mr Clarke hoped Abano
shareholders would follow the lead of the association in
voting in support of the board and company.

Having the issue discussed regularly in the media was not in
the best interests of the company better known for its dental
services brand Lumino The Dentist.

Mr Clarke returned to New Zealand in early 2000 to accept the
position of chief executive officer and managing director of
Eldercare New Zealand, a small publicly listed company in the
retirement healthcare market with annual revenue of $18
million, $55 million of debt and producing an annual core
loss of more than $4 million.

After extensive restructuring, and the sale of assets and
businesses, followed by a reinvestment into new healthcare
and medical services businesses, Abano is now hailed as one
of New Zealand's success stories with a track record of
growth and sustainable profit returns.

Abano employs more than 2000 people in the healthcare
industry, the majority of them in dental partnerships through
Lumino.

More than 1000 people are employed in Australia.

Overall, about 1800 of the employees are working in the
dental partnerships.

The balance of the business includes the Abano joint venture
with Mr Hutson, Bay International, which operates in
Australia and Southeast Asia.

Mr Clark said Bay International was doing well under a new
management team.

Abano also had Ascot and Insight Radiology, in Auckland,
which had three MRI and four CT machines.

Lumino had three dental practices in Dunedin, two in
Invercargill and one in Queenstown. It also operated the
orthotics departments in the Dunedin and Southland hospitals.

There are 75 dental practices throughout New Zealand. Abano
also operates Dental Partners, in Australia.

Mr Clarke said the company realised the growing need for
private high-quality healthcare. Demand in New Zealand
matched that in other OECD countries.

''I am a baby-boomer and we are going to be a burden on the
system.''

In a related move, Mr Clarke is chairman of NIB, the
Australian health insurance company which advertises in New
Zealand using former Kiwis captain and Blues player Benji
Marshall.

New Zealand needed more health insurance companies and NIB
needed a New Zealand director to be chairman and provide
advice on the market, he said.

NIB was one of Australia's largest private health insurance
companies and in Australia, taxpayers were ''punished'' by
the Government by having 1% to 2% added to their tax rate if
they did not have private health insurance.

In New Zealand, it was the opposite.

Private health insurance was almost ''actively discouraged''
and in some cases liable for fringe benefit tax.

NIB was aiming to encourage younger New Zealanders to take up
private health insurance and use it, Mr Clarke said.

''It doesn't work if you are not using it. If you are using
it, make a claim.''

However, Mr Clarke would not be drawn on how older New
Zealanders could be encouraged to retain health insurance in
retirement when they were faced with substantially rising
charges after paying into a scheme for years without making a
claim.

Looking ahead, Abano was expecting substantial growth in its
dental practice model whereby it bought the practice, usually
of a sole practitioner. Dentistry was dominated by sole
practitioners, he said.

The industry standard was the dentists operated on commission
of 40% of turnover, with the remaining 60% going to
overheads.

When part of the Lumino brand, the dentists still received
the 40%, Abano took the remaining 60% and covered expenses
such as staff, supplies and other overheads.

''Expenditure in dental is almost completely private payment.
There is no government subsidy. If you go to the dentist it
is because you see value in paying for it yourself.''

By sharing a brand, the dentists could then be part of a
marketing campaign which they could normally not access.

''It's all about trust. Dentists have to be comfortable
joining an organisation which shares the values and
principles they have.''

The brand was launched in earnest in 2010, during the
economic downturn and when some sole practices were
struggling.

In all cases, the Lumino-branded dentists had patient growth,
he said.

• He first worked as a geologist in Central Otago based at
Roxburgh and Cromwell.

• Interests include skiing in Wanaka each year with his
family. His brother-in-law is John Adams, former head of the
Otago Medical School.

• Managing director and chief executive of Abano Healthcare,
chairman of Tower Medical Insurance following its acquisition
by NIB Holdings Ltd. He is also the independent chairman of
Auckland City Surgical Services, a small surgeon-owned day
stay hospital and a director of St Cuthbert's College, in
Auckland.